The consumption model proposed by ASIF is based on a strategic report prepared by KPMG entitled “Moving towards grid parity” (“Acercándonos a la paridad de red”), which sets out how PV legislation should be modified and proposes a roadmap for the sector up to 2020. The report’s authors estimate that by the middle of the next decade, consumers will find it economically viable to install PV panels and consume the electricity they generate rather than buying it from electricity companies.
The report argues that this scenario is possible because electricity prices are rising, at 4.5% per annum and the feed-in tariff for PV will fall by between 10 and 16% a year under current legislation.
Reward production for own use
ASIF believes the proposal will not involve any additional cost and the only change required would be to establish a system for measuring net consumption.
For the proposal to be a success, consumers would need to be rewarded for the electricity they generate for personal consumption and ASIF therefore proposes “the creation of a new incentive, known as Feed-in Compensation (FiC), which would be paid to the owner of an installation who opts to use the electricity generated. This FiC would cover the gap between the electricity that an owner saves and the FiT he or she would receive under the traditional system”.
The FiC system would not be in place for an unlimited period of time and would only be paid until grid parity is reached, after which owners would receive the traditional feed-in tariff for any electricity sold to the national grid to guarantee the amortisation period of the PV installation.
Market growth
Personal consumption would reduce the resources assigned to the PV feed-in tariff system, which ASIF argues could then be used to grow the solar market using the current quota system. In other words, a lower tariff would mean more installed PV capacity.
In this way, the cost for the electricity system would remain the same, while “personal consumption would increase the volume of the Spanish PV market by 35% up to 2020, from 11.5 GW to approximately 17 GW,” reports KPMG.
This growth in the PV market would, the report highlights, bring a number of benefits. “Contribution to Spanish GDP would amount to between €3.8 and 5.8 billion (from 0.18% to 0.28% of GDP). In total, between 36,000 and 54,000 direct jobs would be created, energy dependence would fall by 4-5%, and peak electricity demand would decrease by 3-6%. Between €2.2 and 2.5 billion would be saved in carbon taxes and it would contribute to achieving the 2020 environmental and renewable energy targets”.
Consumers would also see a reduction in their electricity bills of 60-80%, in the case of homeowners, and 30-50% for commercial and industrial premises.
Cuts in feed-in tariff
ASIF also plans on proposing to Spain’s Ministry of Industry that the feed-in tariff for PV be cut; a possibility which is already contemplated in Royal Decree 1578/2008 regulating the sector. The Ministry of Industry has received a letter from the President of ASIF, Javier Anta, proposing a meeting with the Secretary of State for Energy, Pedro Marín, to discuss this matter, although Javier Anta says that he is still waiting for this meeting to take place.
ASIF’s vision is that personal consumption of electricity produced using PV begins in 2012 by increasing the feed-in tariff for roof-mounted PV installations by two to three percentage points and reducing the feed-in tariff for installations exceeding 100 kW by 29.6% and by 16.9% for ground-based systems.
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